ZF Friedrichshafen is aiming to become the second-largest parts supplier in the world, but that target is being put on hold by negotiations to exit a joint venture with Robert Bosch, people privy with the matter told Bloomberg. ZF is seeking to sell its stake in the joint venture before it could complete an agreement to acquire TRW Automotive Holdings.

Breaking down the partnership, however, is complex and several key parties are away for summer holidays, the sources said. ZF wants to close the deal with TRW in the first half of September, the people told Bloomberg. ZF and TRW have discussed a sale at a price of around $105 to $110 per share, although the final amount is still under negotiations.

In July, ZF and its advisers at Citigroup Inc. and other banks had been exploring a proposal that values TRW at between $110 and $112.50 per share, two people told Bloomberg last month.

ZF confirmed last month that it is holding talks to acquire TRW. Should the transaction occur, ZF could transform itself to become second-largest supplier in the world by sales. It would combine a maker of transmissions with a leading producer of car-safety technology.

Sources told Bloomberg that negotiations were initially expected to last three to four weeks, with a final decision out in mid-August.

One of the sources quipped that the Bosch joint venture has complicated the agreement since there is a contractual clause that bans any party who terminates the partnership from competing in the steering-systems business for a defined time period.

The same source remarked if ZF can't generate enough funds from the selling its stake to help finance the TRW acquisition, the deal could fall apart.

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